RAM Ratings assigns preliminary ratings to Al-Salam REIT's maiden proposed Guaranteed Senior and Perpetual Sukuk

RAM Ratings has assigned preliminary AAA(fg)/Stable and A3(s)/Stable ratings to Al-Salam Real Estate Investment Trust's (Al-Salam or the REIT) proposed Guaranteed Senior Sukuk Tranche of up to RM500 mil (Guaranteed Tranche) and Subordinated Perpetual Sukuk of up to RM500 mil (Perpetual Sukuk), respectively. Both the Guaranteed Tranche and Perpetual Sukuk will be issued via wholly owned funding vehicle ALSREIT Capital Sdn Bhd (the Issuer) under a proposed RM3 bil Senior Sukuk Wakalah and/or Subordinated Perpetual Sukuk Wakalah Programme (Sukuk Wakalah Programme).

The Guaranteed Tranche rating is enhanced by an irrevocable and unconditional guarantee from Credit Guarantee and Investment Facility (rated AAA/Stable/P1 by RAM), while the Perpetual Sukuk is notched down from the REIT's long-term corporate credit rating to reflect its subordinated position and the risk of profit cancellation. Al-Salam's credit profile incorporates a "moderate' likelihood of support from Johor Corporation Berhad (JCorp), whose ratings were affirmed at AAA/Stable/P1 on 25 July 2025 (click here). As Johor's state economic development corporation, JCorp plays a strategic role in shaping and spearheading sustainable socio-economic growth.

In acting as Al-Salam's ultimate sponsor, JCorp drives the REIT's overall strategic direction. Listed on Bursa Malaysia, Al-Salam primarily invests in Shariah-compliant real estate assets and is one of only five Shariah-compliant REITs in Malaysia. The REIT holds a diversified portfolio of 53 properties (the Portfolio), valued at RM1.24 bil as at end-July 2025. The Portfolio is well-diversified across sectors including the retail, office, industrial and education sectors in strategic locations across major Malaysian towns.

With a firm foothold in Johor, the REIT may benefit from the state's strong investment and growth potential afforded